US midstream company Enterprise Products Partners has bought Navitas Midstream Partners for US$3.25 billion (€2.87 billion) from an affiliate of private equity firm Warburg Pincus.
Navitas provides natural gas gathering, treating and processing services in the Midland Basion of the Permian in the US. It has 1,750 miles (c2,816 km) of pipelines and once the Leikner plant is completed, expected in Q1 2022, over 1 billion cfd of cryogenic natural gas processing capacity.
‘The Navitas management team has developed a premier system in the heart of the Midland Basin. The Delaware and Midland Basins are the two most attractive regions in the U.S. in terms of crude oil, natural gas and NGL reserves with each having up to nine geologic horizons. We do not have a natural gas or NGL presence in the Midland Basin other than downstream pipelines. This acquisition will give us an entry point into the basin,’ says Jim Teague, co-CEO of Enterprise’s general partner.
The Midland Basin is one of the most prolific crude oil regions in the US, containing around 20% of active onshore drilling rigs in the country. Navitas has up to 10,000 drilling locations, or more than 15 years of drilling inventory based on current rig counts, on the dedicated acreage, supported by fee-based contracts with additional revenues based on commodity prices.
The debt-free transaction will be funded using cash on hand and borrowings under the partnership’s existing commercial paper and bank credit facilities, and is expected to be completed during Q1 2022, subject to regulatory approvals.